Delhi HC Dismisses GST Dept Review, Says It Could Have Withdrawn SCN Instead Of Inviting Order On Merits

The Delhi High Court has dismissed a review petition filed by the GST Department against an earlier ruling restricting retrospective cancellation of a firm's GST registration.

The court observed that in the facts of the case, the Department, having chosen to invite a decision on merits instead of withdrawing the defective show cause notice and seeking liberty to issue a fresh one, could not subsequently seek to reopen the issue in review jurisdiction.

A Division Bench of Justices Nitin Wasudeo Sambre and Harish Vaidyanathan Shankar observed,

“It was open for the review applicant to concede the position before this Court while this Court passed the order under review dated 30th January, 2025, for withdrawal of Show Cause Notice and seek liberty to issue fresh order with entire details. The review applicant-original respondent has rather chosen to invite the order of this Court based on the factual matrix narrated in the petition and the documents.”

The Court was dealing with a plea seeking review of an earlier judgment dated January 30, 2025, by which the Court had curtailed retrospective cancellation of the original petitioner's GST registration.

In that judgment, the Court had held that the cancellation would operate only from the date of the show cause notice (September 19, 2024), and not from an earlier retrospective date, noting the absence of reasons in the notice and lack of prior intimation to the assessee.

In the review petition, the Department argued that if retrospective cancellation was not sustained, it would disrupt the chain of transactions and affect recovery from parties dealing with the assessee.

Rejecting the plea, the Court underscored the limited scope of review jurisdiction, reiterating that it cannot be used to re-argue issues already decided.

“The contention of the review applicant, in our opinion, amounts to the overruled arguments being sought to be reopened when there is already a concluded adjudication. In any case, the review jurisdiction cannot be equated with original hearing of the case,” it said.

The Court added that there was no error apparent on the face of the record or any miscarriage of justice warranting interference.

As such, the petition was rejected.

For Revenue: Advocate Aakarsh Srivastava, Senior Standing Counsel with Anand Pandey and Farah Shah